In the balance of payments, "net errors and omissions":
a. Is like a balancing item. It makes the balance of payments equal zero.
b. Is estimated by the Commerce Departments of countries and added (or subtracted) only when the government has authority from the International Monetary Fund to do so.
c. Is positive when the current account is negative and negative when the current account is positive.
d. Is positive when the financial account is negative and negative when the financial account is positive.
.A
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Explain the following statement: For the same individual, tastes over goods may vary at the margin as we move from one bundle to another.
What will be an ideal response?
The existence of labor unions could contribute to real-wage rigidity, except that in the United States
A) labor unions are outlawed. B) most workers aren't in unions. C) unions are interested in benefits, not wages. D) unions try to increase employment rather than negotiating over wages.
The marginal rate of technical substitution shows
A) how many machines can be replaced by computers, keeping output constant. B) how many computers are needed to replace workers so that output can increase. C) the rate at which technology advances change marginal productivity. D) how many workers can do the job of one computer, keeping output constant.
A price ceiling established below the market clearing price will usually cause
A) nonprice rationing. B) an excess supply. C) no change in the market clearing price. D) a decrease in the market clearing price.